Michigan Minimum Wage Guide

Michigan employers must comply with both state and federal wage and hour laws. The state's Improved Workforce Opportunity Wage Act establishes Michigan's minimum wage, while the federal Fair Labor Standards Act (FLSA) governs overtime requirements for most employers. In addition, Michigan's Earned Sick Time Act (ESTA) requires most employers to provide earned paid sick time to eligible employees.

Because Michigan's minimum wage exceeds the federal minimum wage, employers generally must pay the higher state rate to covered employees. Employers should also maintain accurate payroll records, review wage rates regularly, and monitor legislative updates affecting wage and hour compliance.

This guide provides an overview of Michigan minimum wage requirements for employers.

Michigan Minimum Wage Requirements

Effective January 1, 2026, Michigan's minimum wage is:

  • $13.73 per hour for most non-exempt employees.

Michigan law also provides a lower training wage and youth wage in certain circumstances permitted by law.

Employers subject to both state and federal wage laws generally must follow the standard that provides the greater employee protection.

Tipped Employees

Michigan permits a tipped minimum wage for employees who customarily and regularly receive tips.

Effective January 1, 2026:

  • Tipped minimum wage: $5.49 per hour

Employers may take a tip credit only if employees receive sufficient tips to earn at least the full applicable minimum wage. If tips are insufficient, the employer must make up the difference.

Overtime Requirements

Michigan generally follows the federal Fair Labor Standards Act for overtime.

Most non-exempt employees must receive overtime pay at:

  • One and one-half times their regular rate of pay

for all hours worked over 40 hours in a seven-day workweek, unless an exemption applies.

Employers should:

  • Track employee hours accurately.
  • Properly classify exempt and non-exempt employees.
  • Maintain complete payroll records.
  • Calculate overtime correctly.

Earned Sick Time Act (ESTA)

Michigan's Earned Sick Time Act (ESTA) became effective on February 21, 2025.

Under the law:

  • Most employees accrue at least 1 hour of earned sick time for every 30 hours worked.
  • Larger employers generally may limit annual use to 72 hours.
  • Small employers generally may limit annual use to 40 hours.
  • Employers may use qualifying PTO policies if they provide benefits that meet or exceed ESTA requirements.

Employers should maintain written leave policies and accurate leave records.

Payroll Recordkeeping

Michigan employers should maintain accurate records including:

  • Hours worked.
  • Wage rates.
  • Overtime hours.
  • Payroll deductions.
  • Earned sick time records.
  • Employee information.
  • Pay dates.

Good recordkeeping supports compliance and simplifies audits or wage investigations.

Employee Classification

Employers should correctly classify workers as:

  • Employees or independent contractors.
  • Exempt or non-exempt employees.
  • Full-time or part-time employees.

Improper classification can result in wage claims, payroll tax issues, penalties, and other legal consequences.

Wage Payment Best Practices

Michigan employers should establish payroll procedures that include:

  • Accurate timekeeping.
  • Consistent pay schedules.
  • Timely payment of wages.
  • Overtime verification.
  • Payroll audits.
  • Supervisor training.

Strong payroll procedures help reduce errors while supporting compliance.

Employer Best Practices

Michigan employers should:

  • Review payroll procedures annually.
  • Monitor minimum wage updates.
  • Properly classify employees.
  • Administer Earned Sick Time Act requirements correctly.
  • Maintain organized payroll records.
  • Display current labor law posters.
  • Train supervisors on wage and hour compliance.

These practices help employers remain compliant while reducing legal risk.

Labor Law Poster Compliance

Most Michigan employers are required to display current Michigan and federal labor law posters where employees can easily read them.

View our professionally updated Michigan State & Federal Labor Law Poster here:

https://www.laborlawhrsigns.com/michigan-state-and-federal-labor-law-poster-mi

Official Government Resources

Michigan Department of Labor and Economic Opportunity – Wage and Hour

https://www.michigan.gov/leo/bureaus-agencies/ber/Wage-and-Hour

Michigan Minimum Wage and Overtime

https://www.michigan.gov/leo/bureaus-agencies/ber/wage-and-hour/frequently-asked-questions/wage-and-hour/minimum-wage-and-overtime-faq

Michigan Earned Sick Time Act

https://www.michigan.gov/leo/bureaus-agencies/ber/wage-and-hour/paid-medical-leave-act

U.S. Department of Labor – Fair Labor Standards Act

https://www.dol.gov/agencies/whd/flsa

Frequently Asked Questions

What is the Michigan minimum wage?

Effective January 1, 2026, Michigan's minimum wage is $13.73 per hour for most employees.

What is the tipped minimum wage in Michigan?

Effective January 1, 2026, the tipped minimum wage is $5.49 per hour, provided employees receive enough tips to earn at least the full minimum wage.

Does Michigan require paid sick leave?

Yes. Michigan's Earned Sick Time Act generally requires covered employers to provide earned paid sick time to eligible employees.

Does Michigan have overtime requirements?

Yes. Most non-exempt employees must receive overtime pay at one and one-half times their regular rate for hours worked over 40 in a seven-day workweek.

What payroll records should employers maintain?

Employers should maintain payroll records, hours worked, wage rates, overtime records, earned sick time records, and employee information.

Where can I obtain an updated Michigan Labor Law Poster?

You can purchase a professionally updated Michigan State & Federal Labor Law Poster here:

https://www.laborlawhrsigns.com/michigan-state-and-federal-labor-law-poster-mi